The Power of Social Buying

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It was born in the bedroom.

WhitePages.com, that is – a prominent internet company and brainchild of Stanford alumnus, CEO, and founder Alex Algard.

As an undergraduate Stanford student in 1996, Algard was having trouble keeping his numerous contacts and e-mail addresses in order. It was then that WhitePages.com, an online directory of contact information, caught his eye.

He purchased the company that year for nine hundred dollars. Thanks to a knack for the innovative, an eye for the trendy, and an ability to pin down creative business partnerships, he was able to grow WhitePages.com from a dorm room enterprise into one of the largest and most trusted online directories today.

WhitePages.com was one of the few companies to survive the dot-com bust in the 90s. Algard attributed its survival in part to the fact that his first priority was always customer value. Even though the company may have been behind the leading edge of new technology, he said, “We’ve always been on the leading edge of new value and invested in the trends that really mattered at the right time.”

In fact, the company is now attempting to capitalize on an up-and-coming trend with DealPop, a new addition to WhitePages.com, that may appeal to college students who are strapped for cash or maybe just looking for a good deal.

DealPop builds on the concept of “social buying,” which utilizes the collective buying power of a large network of people to lower the prices at which a business can provide a service to its customers. Social buying has fueled the rise of recent Internet start-ups like Groupon and LivingSocial.

The result is a win-win-win situation, according to Algard. Customers get great services at reduced prices, businesses are well-publicized and experience a large influx of customers, and the sites mediating the deals get a cut of the merchant’s revenues and build the community where the deals are offered.

One such merchant is YogaSource, a studio often frequented by Stanford students. It is now offering $36 worth of yoga classes for $18. DealPop and YogaSource split the revenue from ticket sales. Unlike its competitors, says Lead Product Manager Travis Pearl, DealPop does not require a minimum number of vouchers to be sold for a deal to be valid.

Social buying has the potential to change the landscape of community retail. That’s why, in recent years, the field has become populated with numerous sites attempting to deliver the best deals to the customer. Social buying brings business to high-quality merchants who otherwise might not receive the visibility they deserve.

As Algard said, WhitePages and DealPop are in the business of matchmaking. But while these sites can send you to the right place to buy your organic flip-flops, they cannot match you with your academic passions or the person destined to be “The One.”

Algard offered his advice to undergraduates, warning against pursuing ideas solely because they will make money. In the long run, he said, that’s not a powerful enough motivator to keep you going.

“Follow your passions first and foremost,” he said. “Don’t try to take an interest in a business idea just for the sake of making money. Follow your own passions and then opportunities will present themselves.”